Submitted by Fox First at Ten on July 15th
NEW YORK (AP) - Citigroup Inc. may seek permission to hike its dividend for the first time since the 2008 financial crisis in the next few months.
The bank's CEO Vikram Pandit said he expects to start discussing returning some cash to investors by the end of the year.
"I believe we will be in good shape and have the capital to be able to do that by the end of the year," Pandit told the U.K.'s Sunday Telegraph in a rare interview. "That's a decision that will have to be taken with our regulators and we will have those conversations at the end of the year."
The bank did not ask the Federal Reserve for permission to raise the dividend last month, when it submitted its latest capital plan.
Citi currently pays a token amount of 1 cent per share every quarter. Pandit had previously promised shareholders a higher dividend earlier in the year.
The Fed in March said the New York-based bank did not have enough capital to raise its dividend and also be prepared to withstand another financial crisis. That was a blow to Pandit, whose 2011 compensation package of $15 million for last year and $10 million retention pay was rejected by shareholders in an advisory vote the following month.
Citigroup nearly collapsed during the financial crisis and was rescued by $45 billion in bailout money from the government in late 2008. In February 2009, Pandit said he would accept a salary of $1 until the bank was able to turn a profit.
The bank has reported profits for two consecutive years now. It is slated to post its second-quarter results before the market opens on Monday. Wall Street expects a profit, albeit a lower one than during the same quarter a year ago.
The global economic slowdown and uncertainty is expected to hurt Citi's business and also reduce the fees that it can collect from helping corporations with their financial markets transactions.
The growing rate-fixing scandal involving the London interbank offered rate, or LIBOR, is expected to be among the issues Pandit will face when speaking with analysts and investors after the release.
The process for setting LIBOR has come under scrutiny since Britain's Barclays bank admitted two weeks ago that it had submitted false information to keep the rate low. Citi is one of the banks that submits data used in setting the rate.
Citigroup shares closed Friday at $26.65, basically flat since the start of the year. Share traded as high as $38.40 during their recent peak in March.
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